Zai Lab Agrees to $250 Million ADS Placement for Drug Development

Zai Lab Limited agreed Thursday, Oct. 22 (ET), to sell 11.34 million American depositary shares (ADSs) for $22.04 each, in a placement expected to provide about $241 million after expenses for global development of its zocilurtatug pelitecan candidate.

The sale is expected to generate about $249.93 million before expenses and $241.17 million net after placement-agent fees and other costs. Zai Lab plans to direct most of the proceeds toward continued global development of zocilurtatug pelitecan, also known as zoci.

Zoci is a Delta-like ligand 3 (DLL3)-targeting antibody-drug conjugate. The planned funding would support its development across global markets.

Each ADS represents 10 ordinary shares. The 11.34 million ADSs therefore correspond to 113.4 million ordinary shares. If the placement closes and the share count does not change beforehand, those shares would equal 9.97% of the ordinary shares issued before the deal and 9.06% of the enlarged total. The first percentage compares the new shares with the pre-placement share base; the second measures them against the total after issuance.

Zai Lab is listed on Nasdaq as ZLAB and on the Hong Kong Stock Exchange as 9688. Its cash, current restricted cash and short-term investments totaled $717.5 million as of June 30.

TCGX is leading the financing. Other participants include abrdn World Healthcare Fund, ADAR1 Capital Management, Balyasny Asset Management, Cormorant Asset Management, Frazier Life Sciences, RA Capital Management, RTW Investments, Sirenia Capital Management LP, Wellington Management and Woodline Partners LP.

The securities are unregistered, and Zai Lab agreed to file a resale registration statement after closing. Completion remains conditional. Zai Lab cautioned, “The Private Placement may or may not proceed to completion.” Closing is expected on or about Oct. 27 (ET), subject to customary conditions.